Spydertrader's Jack Hershey Futures Trading Journal

[8833broc]

Exit Strategies

The last 3 weeks I've been making some money trading, which is a new experience for
me, and I actually have to think about exiting to protect profits as opposed to
exiting to reduce losses.

Exits go into the "art" of trading. Sometimes I draw in a steeper right
Trend Line and wait till the price comes to the steeper RTL to exit. Sometimes I take
profits after a VE line and sometimes I just decide to take X amount of profits and if
price comes back so my profits will be less than X I exit ( ie trailing stops ).

In my mind if you can enter trades with a high probability of a small profit you
can easily adjust your exit strategy to be very successful with this or
any system. Spotting the high probabilty trades is the ultimate goal.

On a mental note I realized the less I fall in love with my lines the more
flexible my thinking becomes about a trade. The lines we draw to represent trends
can frequently be redrawn to fit the current price action better.

 

[aeliodon]

Why is there an injunction on this thread against talking about performance statistics. For example: win%, ave win, ave loss, profit factor, etc. How do you folks measure progress? For me its profit factor. Jack and Spyder would probably say 'skills and experience' are more important and not P/L but that is so damn subjective that you can just make shit up in you head and think that you're making such subjective 'progress' when in fact objectively you're not.

 

[Bearbelly]

Guava

Heres my chart. I guess I am not understanding what youre trying to do. I assumed you were trading the forest level. Exiting at an arbitrary point may offend you but unless you are always in and reversing your exit is going to be arbitrary.

 

[Bearbelly]

Quote from aeliodon:

Why is there an injunction on this thread against talking about performance statistics. For example: win%, ave win, ave loss, profit factor, etc. How do you folks measure progress? For me its profit factor. Jack and Spyder would probably say 'skills and experience' are more important and not P/L but that is so damn subjective that you can just make shit up in you head and think that you're making such subjective 'progress' when in fact objectively you're not.

Most people on this thread are not trading. They are only trying to learn how to read the market.

 

[bundlemaker]

Quote from aeliodon:

Why is there an injunction on this thread against talking about performance statistics. For example: win%, ave win, ave loss, profit factor, etc. How do you folks measure progress? For me its profit factor. Jack and Spyder would probably say 'skills and experience' are more important and not P/L but that is so damn subjective that you can just make shit up in you head and think that you're making such subjective 'progress' when in fact objectively you're not.

I used to feel this way too. What I have found out is that as you do the work of learning, things become less and less subjective. For example, when I started in January, I couldn't even do channels. What Spyder did on his charts looked like some form of magic. Now, my charts match his in almost every way (some flaws he labels differently than mine). For me, this is an objective measure of my progress.

I could mention many such examples. For me, the bottom line is that it's clear that I'm learning something and that skills are building. What you're suggesting is sort of like an engineering student saying that since he can't design a circuit, then first semester calculus is just a bunch of whoey.

Now, there is an element of trust involved. You would need to trust that what Spyder is teaching actually works and that he's not leading us down some black hole. I happen to believe this based on personal contact with him, based on witnessing his market observations, and based on his multi-year performance.

 

[Spydertrader]

If one maintains a focus on the proper execution of the methodology, profits surely flow into one's account. Placing a focus on profits while ignoring other aspects of one's trading provides a recipe for disaster. We can find an accurate analogy within the sports world.

Tiger Woods doesn't stand on the 14th hole concerned of winning the Golf Tournament. Tiger stands focused on the execution of the single task before him - swinging the club and striking the ball with that club. If Tiger Woods can execute his shots with repeated success on any one hole, then his score will be good. If he can string a number of holes together on a single day of the tournament, then he might lead the tournament on that day. If Tiger can string enough days together in the Tournament, he might win the Tournament. However, back on hole 14 on day one of the Tournament (and on every other golf shot during the weekend) Tiger has but one singular focus: swing the club and strike the ball. Tiger knows focusing on this one task is all he needs to do because by doing so, the rest of the things (scoring well on one hole, day or overall) take care of themselves.

The above analogy holds true for learning these methods as well. Choosing to place one's focus anywhere else (other than learning to 'read' the market signals) can produce undesirable results. If one cannot accurately describe continuation or change a minimum of 81 times per day, then I suspect focusing on enter and exit signals isn't a good use of one's energy. Profits are not yet the metric one uses to gauge performance - especially, if one still needs to learn to 'see' market signals.

Now, we're all adults here and capable of making our own decisions, but I cannot comprehend how some of the same people who regularly post their confusion about what the market has told them, can now feel focusing on profits or focusing on entry and exit signals will somehow magically make them understand that which has eluded them for months. Certainly, many people following along have already mastered the art of 'reading the signs' - as well as - taking appropriate and timely action. These individuals have arrived at the appropriate point in time where thoughts naturally turn to making money. Anyone not at this place mentally, needs to take a step back and evaluate themselves honestly, apply some critical thinking and problem solving analysis in order to accurately determine where one's mental state resides.

This above process remains an individual one, but one which must take place from time to time. No competition exists between those following the thread. Everyone reaches their desired goal at different points in time. My goal here is to remind those who - might think themselves ready - to review the early months of this journal and take note how many felt ready to move forward, but in reality, were not.

Hopefully, those to whom this post applies will get the intended positive message of these paragraphs. To those individuals who have already reached and exceeded this threshold, congratulations and a job well done. Perhaps, you can provide some guidance to those who might succumb to the temptation to skip ahead.

Good Trading to you all.

- Spydertrader

 

[guavaman]

Quote from Bearbelly:

Guava

Heres my chart. I guess I am not understanding what you're trying to do. I assumed you were trading the forest level. Exiting at an arbitrary point may offend you but unless you are always in and reversing your exit is going to be arbitrary.

Bearbelly,

Thanks for the post.

It is not that I am offended by taking profits whether deemed arbitrary or not. What I am getting at has more to do with being able to properly read the market in accordance to the JHM. For me, taking profits at times other than when I feel I have a full understanding of the various market action, I believe I am reacting to market action or fear. As opposed to employing the appropriate anticipation of market action.

Like everyone else I am striving to acquire an organic understanding this method. Perhaps, based on Spyder's recent remarks, my seeking data sets that facilitate an exit point is not the best way to further my progression to this desired point.

Back to monitoring, annotating and the occasional sim trade for me

 

[Haroki]

Today's

Very interesting volatility....

So many bars would start red, fall 2-3 pts, reverse to black +1 and then go back to the low again, all in 5 minutes. If I was trying to trade this, it would be kinda difficult to watch it go through the whipsaw of several pts, even though it fell exactly as it should in the frame of things here. Guess I need to get past being a piker if I ever want to do this, eh?

But in hindsight, I can see market reacting exactly as it should - non dom volumr decreasing as it reaches the rtl, and then inc as it BO's...

Only 1 trade today, the obvious long at 15:20 or so... enough for a beer...

 

[dkm]

Quote from Pepe:

I'm assuming that you are trading at 'Tree Level' because you are trying to trade between FTT of channels.

I am presently monitoring for points of change at the tree level. I am using a simulator but only for the purpose of recording time and price at decision points, for detailed assessment after market hours.

David

 

[dkm]

Quote from 8833broc:

Exit Strategies

We need to get away from the mindset of "entry and exit strategies". This method focusses on continuation or change. At the tree level, we trade from FTT to FTT. Of course, not all FTT's will be spotted and mistakes will be made. My present aim is to "sideline" only if I lose track of what the market is saying or if I have to leave the pc.

From my understanding of the attached document, written by Jack, the initial phase is to be able to trade ftt to ftt, with one contract, without the use of str/squ, dom, tic charts etc. Please correct me if I am wrong here.

David